Jubilee Metals Group PLC

("Jubilee" or "the Company" or "the Group")

Registration number (4459850)

Altx share code: JBL

AIM share code: JLP      

ISIN: GB0031852162

Strategic Investment in a Historical Waste Rock Dump in Zambia

Jubilee, a diversified and leading metals recovery business with a world-class portfolio of projects in South Africa and Zambia, is pleased to announce that it has secured one of the largest copper waste rock assets on surface in Zambia and has formed a strategic partnership with Abu Dhabi based International Resources Holding RSC Limited ("IRH"). IRH is affiliated to the Abu Dhabi conglomerate, International Holding Company PJSC ("IHC"), the most valuable listed holding company in the United Arab Emirates, and the second-most valuable in the Gulf Cooperation Council region.

Highlights

·    Jubilee secures one of the largest copper waste rock assets on surface in Zambia.

·  Estimated at more than 350 million tonnes of waste rock material on surface. Early results from preliminary surface sampling indicate zones with grades higher than 1.5% copper ("Waste Rock Project").

·    Jubilee's technical services team has commenced extensive resource definition and process technical review with the aim of completing the project implementation detail and timeline within the next 60 days.

·   Processing by Jubilee's newly developed modular copper units aims to produce in excess of 20 000 tonnes per annum of copper at a cost of below US$4 000 per tonne of copper from this historical waste rock dump.

·    Overall project costs including mining equipment and project infrastructure are likely to be around US$50 million.

·   Jubilee has the capability to construct and commission all modular copper units within a 12-month period and aims to commence within Q1 CY2024.

·   Jubilee executed a binding funding term sheet with IRH to form a dedicated special purpose vehicle ("SPV") through which both the acquisition of the copper waste rock asset and implementation of the processing solution will be funded.

·   Under the funding term sheet IRH undertakes to provide all capital required by the SPV through a combination of equity in the SPV and shareholder loans.

·    Jubilee will be appointed by the SPV to design, implement and operate the mining and processing solution.  

Leon Coetzer, CEO says:

"The Transaction marks a significant milestone on our journey in Zambia, catapulting our copper expansion in the region. The Waste Rock Project, anchored by this substantial resource, will fast-track the rollout of our modular copper processing units in the country with the potential to far exceed our goal of reaching 25, 000 tonnes of copper per annum.

"The binding funding term sheet that we have executed, affords Jubilee the opportunity to aggressively pursue its copper growth strategy in partnership with a prestigious group such as the IRH.  

"This partnership combines Jubilee's unique technical and operational experience with the strategic in country copper focus and financial support of the IRH. The strategic significance of this partnership is further highlighted by the recently announced selection of IRH as the preferred strategic equity partner for Zambia's Mopani Copper Mines asset, which owns the Mufulira Slag Dump Project recently awarded to Jubilee.

"Jubilee and IRH share similar values in their commitment to sustainable investment through broad based community involvement and prioritising local partnerships. I look forward to working with IRH as our partner in bringing this exciting project to full fruition."

ESG commitment

Jubilee's unwavering commitment to responsible mining, demonstrated by our copper processing modules that integrate eco-friendly methodologies, efficient waste rock management, and the rehabilitation of historic waste rock dumps accumulated over decades of copper mining in Zambia. Furthermore, the Waste Rock Project will provide employment opportunities and strengthen the local economy in Zambia.

12 December 2023

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About Jubilee Metals Plc

Jubilee Metals Plc is a low-cost, diversified producer, specialising in the recovery of metal from previously overlooked resources, such as unprocessed historical waste rock, run-of-mine materials and tailings in South Africa and Zambia. The Company's low-capex, modular processing facilities are deployed close to these various types of material, producing high grade concentrates for sale or further refining to finished metal at the Company's downstream facilities. Production currently consists of chrome, copper and platinum group metals (PGMs). The modular processing facilities offer a platform for growth and the rapid expansion of its operational footprint. Jubilee's success is derived from operational excellence, a highly experienced management team and a pioneering Technical Development Centre.

Annexure 1

Waste Rock Project Overview

The Waste Rock Project is located in Zambia's Northern Copperbelt and is estimated to hold in excess of 350 million tonnes of material. Copper results based on historical exploratory sampling of the material as well as preliminary surface sampling conducted by Jubilee, indicates the existence of extensive zones with grades higher than 1.5% copper. The Waste Rock Project aligns with the targeted roll-out of Jubilee's modular copper processing units.

Jubilee has furthermore executed a binding funding term sheet as well as a framework and joint venture agreement with IRH to establish a SPV to fund the acquisition and implementation of the Waste Rock Project.

This Waste Rock Project is a significant step towards Jubilee's ongoing commitment to sustainable extraction and value creation in the region. The Transaction, and the strategic partnership with IRH, marks the culmination of 4 years' of work by the Jubilee team. Jubilee's reputation and relationships in Zambia, coupled with its proven expertise in metals processing, in alignment with IRH's strategy to build a portfolio of strategic mineral assets, has created this unique opportunity to generate value from these historical waste dumps.

Transaction summary

This Waste Rock Project strategically leverages the substantial copper content within the waste material deposited on surface from historical mining activity. The project offers a unique long-term production capacity that supports Jubilee's copper growth targets. It aligns with Jubilee's strategic goals for regional expansion and resource optimisation in Zambia, effectively turning what was traditionally considered industry waste into a valuable asset.

The waste rock resource was formed over 60 years' of mining where the overburden material and ore regarded as too low grade at the time, was discarded onto the waste rock dump in favour of processing higher grade copper ore.

Jubilee's technical services are preparing a preliminary mining plan and have modelled the initial implementation of four processing modules. Alternatives of whether the project is developed by sequential construction of copper processing modules or on an accelerated construction schedule are being considered.

Below, we outline preliminary operational and financial estimates that provide an approximate sense of the scale of investment required for the Waste Rock Project's implementation.

The Transaction secures the sole right to Jubilee (which it expects will be ceded to the SPV with IRH) to purchase all rights pertaining to the waste rock material for a total consideration of US$30 million, which includes a combination of mining rights and other services currently owned by a private company and its shareholders.

The total value of US$30 million is payable over 18 months from the effective date of the Agreement. An initial payment of US$1.75 million, followed by quarterly payments commencing 75 working days ("Initial Period") after the first payment. Jubilee retains the right to cancel the transaction during the Initial Period in the event of any material changes being discovered in the disclosures made.

Jubilee intends to complete an extensive drilling and sampling campaign to improve the resource definition. Processing development work will also be continued within the Initial Period. The focus will be to expedite the project implementation and commencement of copper production.

Funding and SPV

Under the terms of the binding term sheet and the framework and joint venture agreement, the parties commit to the establishment of a new SPV to house the Waste Rock Project. Subject to due diligence, it is intended that all rights to the Waste Rock Project will be ceded from Jubilee to the SPV.

The SPV will be managed through a joint executive committee with equal representation by Jubilee and IRH, with Jubilee appointing the chairman of the executive committee.

It is expected that the SPV will acquire the Waste Rock Project through funding provided by IRH and will reimburse Jubilee for all costs incurred directly related to the development of the Waste Rock Project as well as any funding provided towards the acquisition of the Waste Rock Project prior to the implementation of the SPV.

Additionally, IRH will supply the necessary funding to the SPV for the implementation of the Waste Rock Project, contingent upon the approval of the executive committee and the implementation schedule prepared by Jubilee. The funding provided by IRH to the SPV will take the form of a shareholder loan. Repayment by the SPV of the shareholder loan is contingent upon the SPV first achieving a threshold cumulative net earnings with the SPV's repayment of the shareholder loan limited to a maximum percentage of net earnings, ensuring that the majority of earnings are distributed to the equity holders of the SPV.

Jubilee will assume responsibility for the day-to-day operations of the SPV and will provide technical expertise and services at a mutually agreed-upon fee. Jubilee will be appointed by the SPV to develop, design, implement, and operate the Waste Rock Project.

Ownership of the SPV will be held jointly, with Jubilee owning a minimum of 30%.

According to the terms outlined in the binding funding term sheet, IRH and Jubilee commit to completing the implementation of the SPV and associated appointments before 30 January 2024 with funding provided within five business days thereafter subject only to IRH completing its due diligence.

Preliminary estimates of production and financial metrics

The preliminary Waste Rock Project overview assumes a resource definition based on the initial surface and historical sampling campaigns. The resource definition will be better defined following Jubilee's extensive sampling and process modelling undertaken during the Initial Period.

The figures below serve only as indicative numbers to the potential that the resource holds based on the assumptions and test work undertaken by Jubilee's technical services department.

The initial phase of the project involves selective mining to feed four copper processing modules, each treating 50,000 tonnes per month. Overall project costs including mining equipment and project infrastructure are likely to be around US$ 50 million. Preliminary estimates of production and financial metrics indicate the potential to produce approximately 2000 tonnes of copper per month from four processing modules at an estimated cost of US$3 800 per tonne of copper. The production cost per copper tonne assumes that 60% of copper production is refined to produce copper cathode with the remainder either toll refined or sold into the market.

An accelerated construction schedule for all four modules could generate economies of scale and significant cost reductions. The project timeline for implementing all four modules depends on the sequencing of their installation, but if pursued simultaneously, they could be completed within a 12-month period from the commencement of construction.

The processing modules produce a combined copper concentrate for refining to copper cathode at Jubilee's Sable Refinery in Kabwe or delivery to a partnered toll refiner.

Phase two of the project aims to incorporate the technological breakthroughs developed by Jubilee in partnership with its technology suppliers. There will be a specific focus on the processing of historical tailings and discards from the waste rock project.